40 Billion Reasons GE Won't Sell NBCU

The terrific Kim Masters tells us this morning that: “Earlier this week, the head of a film company told me to count on this: GE is going to sell NBC Universal to Time Warner.”

Then the Daily Beast scribe goes about debunking the rumor that she herself put out there.

We’ll attribute that to the need to file once a week, for now, to engage in some fun Friday speculation. The argument for GE selling NBCU, to almost anyone, has been swirling since about 10 minutes after Bob Wright closed the deal to buy Universal some years back. We have no doubt GE would sell NBCU in the time it takes for Jeff Zucker to get a haircut—if a buyer cropped up at the right price.

But, as Masters points out, the free-for-all in distribution led by the web has made it impossible for media companies to value the product they make, whether it’s a prime-time sitcom, Hollywood blockbuster or crappy Britney Spears’ song.

That being the case, why would Time Warner want more content that it can’t value or subsequently distribute in the most profitable way possible.

Masters' story says the GE and Time Warner were in talks last year, after NBC’s Olympics success, “but Time Warner couldn’t make the numbers work and passed. And no doubt GE would have put a very high valuation on NBC Universal, in excess of $40 billion. Since then, the economy tanked and NBC Universal just announced a 45 percent drop in earnings for the first quarter. And GE has a few issues, too. As entertainment analyst Harold Vogel puts it, “GE needs cash—C-A-S-H.”

And while that makes N-B-C-U expendable, it won’t be at a fire-sale price.